What is the ₹1,000 crore Credit Guarantee Scheme (CGS-NPF) and how does it help farmers?

The CGS-NPF is a government-backed loan facility introduced on December 16 to support farmers in securing post-harvest loans using electronic Negotiable Warehouse Receipts (e-NWRs). With a total corpus of ₹1,000 crore, the scheme aims to reduce distress sales, improve farmers' cash flow, and enhance lending confidence among financial institutions by offering credit risk guarantees. It particularly helps small and marginal farmers, women, SC/ST, and PwD farmers by reducing their guarantee fee and increasing their credit coverage.

Who is eligible to apply under the CGS-NPF scheme?

The scheme covers a wide category of borrowers including small and marginal farmers, women, Scheduled Caste/Scheduled Tribe farmers, Persons with Disabilities (PwDs), as well as MSMEs, FPOs, traders, and farmer cooperatives. Applicants must be availing post-harvest loans backed by e-NWRs through any scheduled commercial bank or cooperative bank to be eligible for guarantee coverage under this scheme.

What is the guarantee coverage and fee structure under this scheme?

The scheme offers a guarantee coverage of up to 85% of the loan amount. For loans up to ₹3 lakhs, the guarantee is 85%. For loans between ₹3 lakhs and ₹75 lakhs availed by small/marginal farmers, women, SC/ST, or PwD borrowers, it is 80%, and for other borrowers, 75%. The annual guarantee fee is 0.4% for farmers and 1% for non-farmer borrowers, making it affordable for priority groups.

How can farmers apply for the CGS-NPF loan scheme?

To apply, farmers must approach any scheduled or cooperative bank offering post-harvest loans against e-NWRs. They should express interest in availing loans under the CGS-NPF scheme. The bank will evaluate the e-NWR, borrower profile, and forward the case for guarantee registration. Registration is done by the lending bank through the Credit Guarantee Fund Trust for Warehousing mechanism or designated portal. Farmers don’t have to directly apply to the government for this scheme.

What documents are required to avail the loan under CGS-NPF scheme?

Applicants need to provide a valid e-NWR for their agricultural or horticultural produce stored in a registered warehouse, along with KYC documents (Aadhaar, PAN), land ownership or tenancy proof, bank passbook, and caste or disability certificate (if applicable for reduced fee eligibility). The lending bank may also ask for loan application forms and storage receipts to verify eligibility and process the loan.

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Centre Launches ₹1,000 Crore Credit Guarantee Scheme for Post-Harvest Loans

Komal Bajpai

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Updated: 28-01-2025 at 7:31 AM

Centre Launches ₹1,000 Crore Credit Guarantee Scheme for Post-Harvest Loans

On December 16, the government launched a loan facility under a credit guarantee of ₹1,000 crore called CGS-NPF to help farmers get post-harvest loans. This facility has a guarantee cover for loans against e-NWRs and contributes to discouraging distress sales and enhancing institutions’ confidence in financing farmers. If you would like to know more about the main advantages of the agriculture loan scheme, read on.

Overview

Category	Details
Total Corpus	₹1,000 Crores.
Loan Coverage	Up to ₹75 lakhs for agricultural purposes and Up to ₹200 lakhs for non-agricultural purposes.
Eligible Institutions	All scheduled banks and cooperative banks.
Eligible Borrowers	Small and Marginal Farmers (SMF), Women, SC/ST, PwD Farmers and Other Farmers, MSMEs, Traders, FPOs, and Farmer Cooperatives.
Risks Covered	Credit risk and warehouseman risk
Guarantee Fee	0.4% per annum for farmers and 1% per annum for non-farmers.
Guarantee Coverage	85% for loans up to ₹3 lakhs, 80% for loans between ₹3 lakhs and ₹75 lakhs (SMF/Women/SC/ST/PwD) and 75% for other borrowers.

Settlement For Claims:-

Loan Amount	1st Installment (% of Default Amount)	2nd Installment (% of Default Amount)
Up to ₹75 lakhs	75%	25%
Above ₹75 lakhs and up to ₹2 crore	60%	40%

What Is The ₹1,000 Crore Credit Guarantee Scheme?

This Sarkari scheme plans to ensure financial stability for farmers for post-harvest loans against e-NWRs. To understand it better, read the following points carefully:-

Objective: To reduce distress selling by farmers and to promote pledge finance for agricultural and horticultural produce contained in existing registered warehouses.
Coverage: Provides a guarantee cover for loans drawn by farmers, traders, and Farmer Producer Organisations (FPOs).

Who Can Benefit From The Scheme?

ESDM focuses on Small and marginal farmers, Women, SC/ST farmers and Divyangjan (PwD).

Small and Marginal Farmers: Of the loans particularly up to ₹75 lakhs, 80–85% will be covered.
MSMEs, FPOs, and Traders: Whereas loans up to ₹ 200 lakhs will be 75% covered.

How Does The Scheme Support Post-Harvest Lending?

The government scheme raises financing against e-NWRs and encourages agricultural storage in the registered warehouse.

Loan Guarantee: Gives confidence to the bankers for providing Pledge finance to the farmers.

Lending Target: The technique aims to at least double and reach ₹5.5 lakh crore in post-harvest lending in the next 10 yrs.

What Are The Key Steps For Warehouse Development?

This Sarkari Yojana also focuses on the development and enhancement of warehousing facilities. To understand it better, read the following points carefully:-

Warehouse Registration: It aims to register 40,000 warehouses in the course of the next one to two years.
Proximity to Farms: Favours construction of warehouses closer to farmlands to easily access.
Reduced Repository Charges: propose to make some changes from repositories like NERL and CCRL less costly.

Why Is This Scheme Significant for Farmers?

This government scheme prevents farmers from being forced to sell their produce and also enhances their cash flow status.

Increased Income: Enhances timely price realisation by stocking produce in stores called warehouses.
Special Focus Groups: Offers small and marginal farmers, women and disadvantaged groups at lower guarantee fees.

Add subheadings for parts on how to apply for this scheme, what is the eligibility criteria, and what documents are required.

Conclusion

The Credit Guarantee schemes worth ₹ 1000 crore especially for the post-harvest credit loans to farmers are one of the most welcoming changes that can bring about a financial power shift in the hands of farmers thereby helping in curbing distress selling. This signal and call intends to provide better loans for food processing units as well as strengthen the storage facilities hence holding a better tomorrow for the Indian agricultural sector.

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